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Mexican Farmers See Death Sentence in NAFTA
Published on Saturday, December 28, 2002 by Reuters
Mexican Farmers See Death Sentence in NAFTA
by Pav Jordan
 

YECAPIXTLA, Mexico - Cirilo Yanez has been farming sorghum in the sleepy Mexican town of Yecapixtla his whole life, but he expects to be forced out of the business after a new phase of the North American Free Trade Agreement comes into effect on Jan. 1.

"As long as I've been alive, I have been in sorghum, as were my parents and as are my children," said the weathered Yanez, 62, who farms seven acres of the grain in central Morelos state and sells it as livestock feed.


Mexican farmers ride their horses onto the grounds of the Mexican lower house, or Chamber of Deputies, December 10, 2002 at Mexico City's San Lazaro legislative palace to protest the January 1 opening of borders to zero-tariff trade on most farm goods. The farmers are protesting the terms of the North American Free Trade Agreement (NAFTA), which Mexico joined with the United States and Canada in 1992. REUTERS/Henry Romero
On the first day of 2003, protective tariffs on imports of sorghum and most other farm goods will disappear under NAFTA and cheaper U.S. imports are expected to flood into Mexico and dominate market share.

Yanez says that even now, with protective tariffs on imports, he and other Mexican producers cannot compete with cheaper U.S.-produced sorghum, which is used in snack and baked products, to produce ethanol and as animal feed.

Mexican farmers, many of whom till small plots with donkeys and follow ancient traditions such as sowing seeds barefoot, cannot compete with U.S. machinery or infrastructure and, ultimately, in price.

In January, import tariffs on apples, wheat, sorghum, rice, soy and many other farm products will drop to zero, from between 1 percent and 2 percent now, in the second phase of trade liberalization between NAFTA members Canada, Mexico and the United States.

Chicken and pork imports will see tariffs lowered more drastically, from as high as 49 percent in the case of poultry.

Four other products, including powdered milk, corn and beans will get five more years of protection before tariffs go to zero in 2008.

DEATH SENTENCE?

Producers see a death sentence in the agricultural chapters of NAFTA, signed a decade ago and implemented since 1994, and blame the Mexican government for not preparing them for free trade.

"The governments of the recent past and of the present have refused to assume the commitment of rural development; they have refused to assume the responsibility of promoting agricultural activities, as it has been much more comfortable for them to be simple spectators," legislators said in a recent document sent to Mexican President Vicente Fox as part of a petition for more protection of the agriculture sector.

"The countryside is being abandoned," said Sergio Ramirez, a sorghum farmer from Yecapixtla, a tiny farming pueblo some 50 miles south of Mexico City. He said he believes he will soon be yet another casualty of NAFTA.

Ramirez said more and more sorghum farmers have abandoned their lands in the area since Mexico entered NAFTA because they could not compete with their U.S. counterparts, blessed with economies of scale most Mexican farmers can only dream about.

The average farm size per Mexican farmer is between five and seven acres, whereas U.S. and Canadian farmers' properties are normally over 250 acres each.

Critics say that, other than some fantastic success stories in fruits and vegetables, the Mexican farm sector is unable to compete virtually across the board.

"The Mexican countryside is becoming deserted. Many have gone already," Yanez said. He said disillusioned farmers usually make their way into Mexico City where they do bit jobs, or cross illegally into the United States to find work.

The government says it will not attempt to renegotiate NAFTA, but it has announced subsidies to protect some farmers.

In November the government announced about $3 billion in agricultural subsidies meant to lower costs and guarantee minimum prices for Mexican farmers in some products amid heightened competition from U.S. farm goods.

The subsidies were part of a record 102.6 billion pesos ($10.09 billion) in farm aid for 2003 to support electricity and diesel fuel costs and to offer competitive financing to the struggling agricultural sector.

That compares to some $190 billion in U.S. farm subsidies over the next 10 years.

The measures have been criticized by many who say the aid is not enough and who speculate it will likely get siphoned off in bureaucratic expenses and by sticky-fingered officials.

Some farmers say the aid will never get to the small campesino producers and that it is destined in fact for the large farmers who did manage to boost production efficiency during NAFTA's nascent years.

Mexican farmers are suffering what the rest of the developing world has been screaming about, their inability to compete with U.S. and European farm subsidies.

MEXICO ILL PREPARED

Tariffs have been lowered gradually since 1994, when the treaty went into effect for Mexico, and many question why Mexican farmers are not prepared, and why they are making such a fuss, if they had eight years to prepare for the 2003 opening.

Still others say not much will change on Jan. 1.

A top U.S. agriculture official said in late November that Mexico could have readied itself more for tariff-free borders.

"We're a little perplexed that the campesino groups would come in and say, 'Oh my God, we're going to be destroyed. Come 2003, January 1, the flood gates open,"' a U.S. government official told Reuters.

"And our point is, well, no, nothing's really changed."

The official, who asked not to be identified, said the only area of real concern at the start of next year was in poultry, which would be unable to handle a zero-tariff imports after protection of 49 percent this year and more than 90 percent last year.

"And we're working with the government of Mexico on poultry just so we can try to reduce the sharp impact," he said. "They did feel that they were unprepared to compete. In fact they can't."

The U.S. Embassy in Mexico City was a target in recent weeks for protests from farmers demanding the Jan. 1 border opening be postponed, or that NAFTA be renegotiated.

Other protests saw the lower house of Congress blockaded by farmers from around the country who rode into the city on horseback, leading cows behind them, to demand more government protection from U.S. competitors in the new year.

Copyright 2002 Reuters Ltd

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